2022 changes to GAFTA Rules and Standard Contracts

2022 changes to GAFTA Rules and Standard Contracts

GAFTA has updated its GAFTA Weighing Rules No. 123, Arbitration Rules 125 and standard contract pro formas. All changes came into force on 1 January 2022. In this update we explain what the changes are about.

Weighing Rules

The Weighing Rules apply to all contracts incorporating GAFTA standard contract terms to regulate the required weighting process unless otherwise agreed by the parties.

The amendments aim to clarify some aspects of the weighting process. In particular, the provision concerning discontinuous weighers is supplemented with a new paragraph:

Weighing scales must be certified to accuracy class 0.2%. Weighing scales that are certified to the lower 0.5% accuracy classification may only be used if both parties to the contract explicitly accept this method of establishing the loaded and/or discharged weight in writing.”

Further, the Weighing Rules are supplemented with a new clause “CRANE SCALES” establishing the rules for the weighting process of one of the most common ways of weighting goods in Southern Ukraine – floating cranes. The clause provides:

Cranes with an integrated scale that are classified as a discontinuous automatic totalising weighing system and are certified to accuracy class 0.2, are an accepted means of accurately determining loaded and/or discharged weights. Crane scales certified to accuracy class 0.5 may only be used provided that both parties to the contract explicitly accept this method. The method of establishing the weight shall be stated on the weighing certificate.”

We understand that the aim of the new amendments is to clarify the weighing procedure during the loading or discharging of the goods and thus to reduce the frequency of disputes arising between the parties on this basis. With these amendments to the Weighing Rules, it appears that scales or cranes with certain characteristics may be used only with the consent of the parties.

Arbitration Rules

Another amendment was made to Arbitration Rules 125. The board of appeal was deprived of its power to order relief upon the application of either party on a provisional basis (clause 12.8 in pre-2022 rules). Earlier, such relief could have been granted in the form of “disposition of property as between the parties and/or payment of all or any part of the sum(s) of money required by the terms of the award of arbitration to be paid by either party to the other or which shall be deposited in such bank and in such currency (either in the United Kingdom or abroad) as the board of appeal may direct.“

In practice, this means that on appeal the arbitrators could, upon request, order the appellant to pay the sums awarded against it by the first-tier tribunal to a nominated bank-account. If the appeal was successful, then the sums would be returned to the appellant. Otherwise, the sums would be paid to the other party. If the appellant did not comply with the order, then the appeal would be deemed to be withdrawn.

This measure was similar to “security for costs” under English Civil Procedural Rules. However, certain conditions must be met in order for the security to be granted, whereas the relief under clause 12.8 of Gafta 125 Rules was a discretion of arbitrators.

Contract pro formas

Additionally, GAFTA amended other standard contract pro formas by making minor changes to the clause “NOTICES”. The current (amended) version of the clause now reads as follows:

“All notices required to be served on the parties pursuant to this contract shall be served in legible form by E-mail, or by other mutually recognised electronic method of rapid communication.”

This change has been made because E-mail is now the most common way of serving notices. The previous edition of pro formas stipulated that the methods of rapid communication included “either telex, or letter if delivered by hand on the date of writing, or telefax, or E-mail, or other electronic means.”

The change concerns the following pro formas: 1, 2, 4, 5, 6, 8, 9, 10, 15, 18, 19, 21, 23, 24, 25, 27, 30, 31, 38, 39, 40, 41, 43, 45, 47, 48, 49, 54A, 59, 60, 61, 62, 64, 78, 78UA, 79, 79A, 79B, 80, 80A, 81, 82, 83, 88, 89, 90, 94, 94A, 95, 96, 97, 98, 99, 100, 100A, 101, 102, 103, 104, 106, 109, 110, 111, 112, 113, 114, 115, 118, 119, 120, 122, 200, 201, 202, 203.

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